British Gas MD to get 10 million pound golden handshake!

[petercj]

Is this taking the pith?

British Gas chief Phil Bentley to quit with £10m send-off | Business | The Guardian

 

[Ray Stafford]

Well the journalist is certainly taking the pith.

To arrive at that £10m figure, he has twisted the truth beyond all recognition.

To start with, he has valued £6.65m worth of share options as if they were cash. Depending on when the options were granted, and at what price, they could be worth anything between £sweet FA and £2-3 million.

Then he has lumped in the entire value of the man's pension pot, as if it was part of a payoff. Sure, the bloke is well paid (probably even over-paid) but that £3.6 million pension pot has been accumulated over several years - from the wording of the headline the journo makes it sound like its part of his golden handshake, which it clearly isn't.

The cash element of £635,000 is pretty juicy, but even that is a guess - the wording is "is expected to..." and presumably thats because thats what is in his contract? I expect my employers to honour my contract.

Finally, the conflation of retail gas prices with Phil Bentley's personal remuneration is a straightforward attempt to generate politics of envy, and make it sound like gas prices are only rising because of greedy fatcats like Bentley.

Rubbish journalism, and one of the reasons that I rarely buy a newspaper. I wonder if its the same journalist that wrote the "plumbers on £100k" article. Its just about as accurate.

I don't know whether Mr Bentley has provided good value to Centrica shareholders or not. Thats for them to decide. Unfortunately, with our current corporate governance arrangements, the smaller shareholders in particular probably won't have their voices heard.

 

[Howsie]

You should put that to him on Twitter Ray. @DanMilmo

 

[Ray Stafford]

You should put that to him on Twitter Ray. @DanMilmo

I don't tweet Howsie. I do have an account, but I don't know how to use it. Might ask MickW to do it, he is the twit(terer) round here.

 

[Howsie]

I do hate this sensationalist style of journalism and I might even have a go at him myself later on.

 

[petercj]

Well the journalist is certainly taking the pith.

To arrive at that £10m figure, he has twisted the truth beyond all recognition.

To start with, he has valued £6.65m worth of share options as if they were cash. Depending on when the options were granted, and at what price, they could be worth anything between £sweet FA and £2-3 million.

Then he has lumped in the entire value of the man's pension pot, as if it was part of a payoff. Sure, the bloke is well paid (probably even over-paid) but that £3.6 million pension pot has been accumulated over several years - from the wording of the headline the journo makes it sound like its part of his golden handshake, which it clearly isn't.

The cash element of £635,000 is pretty juicy, but even that is a guess - the wording is "is expected to..." and presumably thats because thats what is in his contract? I expect my employers to honour my contract.

Finally, the conflation of retail gas prices with Phil Bentley's personal remuneration is a straightforward attempt to generate politics of envy, and make it sound like gas prices are only rising because of greedy fatcats like Bentley.

Rubbish journalism, and one of the reasons that I rarely buy a newspaper. I wonder if its the same journalist that wrote the "plumbers on £100k" article. Its just about as accurate.

I don't know whether Mr Bentley has provided good value to Centrica shareholders or not. Thats for them to decide. Unfortunately, with our current corporate governance arrangements, the smaller shareholders in particular probably won't have their voices heard.

The package he walks away with will be worth 10.000.000 pounds, how it is bundled up doesn't make a great deal of difference imo.

No one is saying that gas prices are only rising because of "fat cat" payments like Bentley's (obviously there are other factors involved), however, such windfalls obviously do contribute to the ever rising cost of energy.

Six companies have shared a monopoly since the privatisation of the utilities: gas and electricity are essential commodities for most people, and these companies have cashed in big time on exploiting the public's essential need for energy. Bentley's package is just one small aspect of the great British rip off.

No doubt he will make the most of any off-shore advantage he can gain re due taxes when the the time comes - something else that you sprang to the defence of - although of course you were just playing: "devils advocate" in that post! lol

 

[Howsie]

He's not walking away with a package worth £10m.

Lets just take one part of his package, his options. He will have been granted options at various times during his tenure at BG. These options have a vesting timeline and a strike price (the price he buys them at). Say he had 100 options at a strike price of 40p. That means each of his shares are worth 60p of profit to him once he's purchased them. So to say his package includes the price he has to pay for them is simple wrong and intentionally misleading. Many people will read that headline and believe it. It isn't true.

 

[Ray Stafford]

The package he walks away with will be worth 10.000.000 pounds

No it won't Peter, unless he was granted his share options at £0 which I very much doubt.

I don't know when the share options were granted, but looking at Centrica's share price history, I would be surprised if those options are worth more than £3m, and they could very possibly be worth nothing at all.

I have a pension that has been building up over decades. When I eventually take it, I hope it will be worth a fortune. (Probably won't be, but I can live in hope). I suppose you could say that when I retire I will "walk away" with a package worth £whatever, but I consider that to be already mine, put away over the years to protect me when I can't work any more. Its not severance pay, its more like savings.

No doubt he will make the most of any off-shore advantage he can gain re due taxes when the the time comes - something else that you sprang to the defence of - although of course you were just playing: "devils advocate" in that post! lol

If we have a good year, I may take (perfectly legal) steps to reduce my tax liability, and it would be hypocritical of me to criticise someone else for doing the same thing, so long as it is legal.

 

[Howsie]

That's the part I don't agree with Ray. Many of my clients do this and I think it's wrong but we agree to disagree on this point with them.

 

[Ray Stafford]

That's the part I don't agree with Ray. Many of my clients do this and I think it's wrong but we agree to disagree on this point with them.

Which part Howsie?

 

[Howsie]

Chris?

The taking the money off shore part.

 

[Howsie]

Lol caught ya

 

[Ray Stafford]

Chris?

Sorry - I have a mate called Chris Howser, so when I see "Howsie" I automatically think of Chris!

The taking the money off shore part.

We don't know whether he will do that or not, but the principle of legally reducing tax liability is something that we all do - even if its just buying duty free on the way back from a holiday.

 

[Howsie]

Just because its legal doesn't make it right. But everyone seems to be at it and maybe it's me dreaming of a better world...

Amazon. Starbucks. Google. /repeat

 

[Ray Stafford]

And we have moved into complete speculation. Even the Journo who wrote the original article didnt descend to attacking a man for what he hasn't even done!

 

[Howsie]

Eh! Speculating about what?

 

[petercj]

He's not walking away with a package worth £10m.

Lets just take one part of his package, his options. He will have been granted options at various times during his tenure at BG. These options have a vesting timeline and a strike price (the price he buys them at). Say he had 100 options at a strike price of 40p. That means each of his shares are worth 60p of profit to him once he's purchased them. So to say his package includes the price he has to pay for them is simple wrong and intentionally misleading. Many people will read that headline and believe it. It isn't true.

The 'devil will always try and escape through the detail' - just as Bankers will argue that their massive bonuses are not paid in cash!

The issue re this pay-off (or whatever term might be used) is quantifiable by the the value accrued by Bentley during his time at BG, and quite possibly no one but BG and Bentley will know exactly what the total value is.

One can nit-pick over quantum, however, the bottom line is that it is a massive leaving package which has been made possible by the hold BG have over consumers of energy.

Over the past 10 years BG have taken the lead in raising energy prices (at least 90% of the time) and within a few weeks the other companies follow suite.

BG raise their price, then there is a load of nonsense put out about saving money by switching, and then the going rate set by the six members of the cartel becomes the norm. Many of those who have switched find that it's been a load of hassle, and that within a few months they are no better off, and some may be worse off.

The business of switching energy provider has created a nice little earner for some website "entrepreneurs" who have been able to make their fortunes out of perpetuating the myth that people can save money due to competition in the energy market.

The context of this payoff is part of the disgrace and condemnation of it.

 

[gasmanrob]

I'm just glad they didn't publish the £300.00 pay off I received when we went our separate ways. The back lash I would have got from that is un thinkable lol.

 

[petercj]

I'm just glad they didn't publish the £300.00 pay off I received when we went our separate ways. The back lash I would have got from that is un thinkable lol.

Only 300 quid!

Hmm, perhaps you didn't meet your powerflush targets!

 

[Howsie]

Pointing out lies isn't nit picking though.

I don't agree with bankers taking huge bonuses but the misrepresentation of facts is what they did and the journo is doing the same thing.

 

[petercj]

Pointing out lies isn't nit picking though.

I don't agree with bankers taking huge bonuses but the misrepresentation of facts is what they did and the journo is doing the same thing.

The statement made is that he will leave with a package worth over 10,0000.000 - I don't think you can accuse someone of telling lies because they put together an estimate, which is all it can be without detailed information from the horse's mouth when the leaving day comes.

He is free to refute such claims, but I doubt very much that he will.

The broad facts are plain enough, and the public are increasingly growing intolerant of bonanza style profiteering by the energy companies, and this kind of golden handshake (call it what you like).

The name of the game has been to make as much money as possible, and reduce payment of tax as much as possible, which may be legal, but such profiteering is now increasingly being questioned. All sense of morality has been abdicated to the market place, and those who play the game will justify their actions by the profits they make and their ability to bend the rules to their advantage without actually breaking them - although an increase in transparency might show that the rules need changing away from being so flexible.

Bear in mind that we are not talking about profit made from a decent days work. This variant of 'profit' is made off the backs of working people by those who sit on their backsides all day playing monopoly.

 

[Howsie]

I'm 100% with you on the fact cats thing but I have a problem with the style of the article. The headline is simply untrue.

 

[petercj]

I'm 100% with you on the fact cats thing but I have a problem with the style of the article. The headline is simply untrue.

And I'm with you 100% on the need for more accurate reporting by the media, but if Bentley was getting a package worth one million he would be getting a good deal imo.

Consequently, I'm not really bothered if the author of the article is a million or two out, and I don't think many people will be.

As far as I'm concerned this report is just another paragraph in the memoirs of Thatcher, and yet another piece of evidence that the switch during her reign away from manufacturing industry and towards national dependency on service industry was a mistake. Which I recognise was an error of judgement consolidated and perpetuated by New Labour - just in case someone thinks I'm being Party political.

 

[nickelarsed]

manufacturing was hardly a success in the 1970's. It was in fact trashed long before Thatcher

 

[petercj]

manufacturing was hardly a success in the 1970's. It was in fact trashed long before Thatcher

Like to give some examples?

British industry was overdue for investment, and it was Thatcher that trashed what was left of it.

Since that time the collective British psychi has been indoctrinated with the idea that Britain is not up to manufacturing, we could have done as well as the Germans with the right leadership and investment.

Many of the problems around today have their roots in the Thatcher era - one example being the Incapacity Benefit system, which her Government brought in to massage the massive unemployment figures that her policies created.

The privatisation of training has been a disaster for Britain, and has created many a skills shortage - gas and plumbing being just one example.

Turning over the care of the elderly over to the private sector has led to poor training and lack of decent care.

The jungle created by the Thatcherite ideology has seen thousands of small businesses come and go over the past 30 years, and Britain has become a safe harbour for big businesses, many of whom operate as monopoly players.

Junk food sold through an American model of franchising; the virtual collapse of individual pubs across Britain has seen large chains taking over. Retail food dominated by supermarkets. DIY market dominated by a national chain, as will be plumbing merchandising in a few years time.

Working people were sold the idea that letting the rich prosper would be good for all concerned (i.e. the trickle down effect of wealth) which never really happened, the fool's gold of the Thatcherite promise was propped up by easy credit and the rise in house prices. Not surprisingly the bubble eventually burst!

Water has become a "precious commodity" since the privatisation of the water boards, and they can't wait to sell the stuff by the litre.

The pubic have been ripped off for gas and electric for some time, and despite massive profits, Britain is poorly prepared for future energy supply.

Working people are giving up their jobs because the can't afford the rail fares to get to work.

Bentley is something of a pawn put in place to run the machine that prints money quicker than the Treasury can.

And still the media churn out the propaganda that says privatisation of everything is the only viable model.

The accusation that the media have been misleading about this fat-cat payoff is seriously amusing.

 

[nickelarsed]

British industry was trashed by nationalisation. Something the German's, Japanese and American's never did to theirs. That was my point. Hate Thatcher as much as you want, I do. I hate all of them . But pretending that we were any better off before her is simply not true. And pretending that all those problems listed are some how down to the evil Thatcher is just plain wrong. It makes life easier to blame her for lots of people because it takes the focus off the faults of others. Remember what they called us in the 1970's? The sick man of Europe, we even had rolling power cuts, you had to wait for months just to get a phone line. At one point the dead were not even getting buried. So yea Thatcher I'm sure did lots wrong, but she was no worse than those that went before or after her. And better than some

 

[petercj]

British industry was trashed by nationalisation. Something the German's, Japanese and American's never did to theirs. That was my point. Hate Thatcher as much as you want, I do. I hate all of them . But pretending that we were any better off before her is simply not true. And pretending that all those problems listed are some how down to the evil Thatcher is just plain wrong. It makes life easier to blame her for lots of people because it takes the focus off the faults of others. Remember what they called us in the 1970's? The sick man of Europe, we even had rolling power cuts, you had to wait for months just to get a phone line. At one point the dead were not even getting buried. So yea Thatcher I'm sure did lots wrong, but she was no worse than those that went before or after her. And better than some

The Iron Lady was part of the problem - she wanted to do battle with the unions for her own ideological ends.

Yes, there were some idiots around in the unions at that time, but because Thatcher caused such a sense of insecurity in many working people the idiots got listened to.

In the 60's the Morris / Austin Mini was a massive success, and was admired across the world.

British steel was some of the best in the world, and you could tell whether it was British or not as soon as you started working with it.

The British motor cycle industry was closed down in Britain, and it was said there that was no longer a market for motor cycles.

The Japanese proactively created a market for their motorcycles by using state of the art manufacturing methods.

Very few people in Britain today understand what role the unions played in training and the maintenance of working standards, and the development of safe working practices, and employee rights. Mention the unions and most people think of militant trouble makers and the disruption of the 70's, particularly in the South of England.